Mutual fund and exchange-traded fund investors on average paid lower fees in 2018 than the year before and saved about $5.5 billion in fund expenses compared to 2017, according to a study of U.S. funds published by Morningstar.

The study found that the asset-weighted expense ratio across U.S. funds dropped to 0.48% in 2018 from 0.51% in 2017. The year-over-year decline of 3 basis points is the second largest recorded since Morningstar began tracking asset-weighted fees in 2000.

The move to lower-cost funds has been the main driver behind the decline in asset-weighted average fees. In 2018, active funds' fees fell to 0.67%, while passive funds' fees fell to 0.15%. On average, actively managed fund investors paid about 4.5 times more than investors of passively managed funds in 2018.

"As awareness grows around the importance of minimizing investment costs, we have seen a mass migration to low-cost funds and share classes," said Ben Johnson, Morningstar's director of ETF and passive strategies research, in a news release announcing the results of the study.

The results of Morningstar's annual study also reveal that investors are paying about half as much to own funds as they were in 2000, roughly 40% less than they did 10 years ago and about 26% less than they did five years ago.

The study reveals that in 2018, the cheapest 20% of funds saw net inflows of $605 billion, with the remaining 80% of funds experiencing net outflows of $478 billion. Of the $605 billion that flowed into the cheapest 20% of funds and share classes, 97% of net new money flowed into the least costly 10% of all funds.

Most investors own lower-priced funds, with 83% of all assets currently being held in mutual funds and ETFs whose fees rank in the bottom 40% when compared with other funds in their category group.

"A shift in the economics of advice has further accelerated this trend," Mr. Johnson added. "As advisers move from being paid on commission to collecting a fee for their service, a clear preference for semi-bundled and unbundled funds and share classes has emerged, as embedded advice and distribution costs are being stripped away from funds' fees and charged separately."

Among the asset managers with the lowest asset-weighted average expense ratios, Vanguard Group continues to have the lowest, with 0.09% in 2018. State Street Global Advisors was a close second, with 0.17%; followed by BlackRock (BLK)'s iShares, with 0.3%.